Coca-Cola: Managing Innovation in Business for Market Leadership

This report assesses Coca-Cola's innovation strategies, focusing on adapting to changing market trends and maintaining a competitive edge. It highlights the importance of food safety, sustainable development, and offering healthier alternatives to attract health-conscious consumers. The company aims to enhance manufacturing plant efficiency and emphasizes the need for strong leadership, competent management, and skilled employees to drive successful innovation. The study concludes that creative leaders, efficient management, and motivated employees are crucial for innovation, which helps maintain uniqueness, enhance profit margins, and secure a higher market position. The report further explores the future of the industry, Coca-Cola's innovation requirements beyond 2020, and strategies for building future innovation capabilities, including corporate leadership principles, key area identification, and executive responsibilities.

Managing Innovation in Business
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Executive Summary
Innovation can be defined as the process by which an organization incorporates new creative
ideas that are economically feasible and implements them in order to develop the organization,
both in terms of market shares and in terms of increased profit margins. The following study is
conducted on Coca-Cola in order to assess the innovations Coca-Cola has brought into the
market and the innovations that are necessary in order to keep up with the changing market
trends. As per study it can be said that Coca–Cola, being a reputed organization would be able to
withstand the challenges posed by the other similar companies in this sector. In order to increase
its market share the company must aim to ensure food safety and food hygiene.
Moreover, the recent times necessitate the need for sustainable development, and hence the
company is working on designing its processes in a manner that it promotes sustainable
development. In recent times, majority of the individuals are becoming more and more health
conscious and therefore switching to sugar free options such as diet coke and non-carbonated
drinks are slowly gaining importance in the market. Therefore, the organization is aiming to offer
healthier alternatives to the traditional cola drinks. This fetches the company more and more
young heath conscious consumers. In order to reduce the number of manual laborers required,
the company is trying to build more and more highly productive and efficient manufacturing
plants, which would increase the productivity by 25% as per estimates. However, for successful
implementation of these innovative strategies, the organization needs creative and strong leaders,
a competent management team and highly efficient and highly skilled employees.
A true leader would ensure that creative ideas that are brought in into the company are not only
easy to implement, involves simple processes but are also practically viable and economically
feasible. An efficient management team would keep check on the proper implementation of the
ideas, proper maintenance of workflow and helps to keep the employees inspired and motivated.
Motivated and hard working employees are the key to success of any organization. Hence, the
organizations leaders and managers must to train the employees in a way that their skills are
polished and they are highly productive and efficient. From the study, it can be concluded that
strong minded creative leaders, highly observant and efficient management team and highly hard
working motivated employees are the pre requisite for any kind of innovation. Innovation would
not only help the organization to maintain its uniqueness and help to sustain itself in the rising
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competition in the market, but would also help the organization to enhance its profit margins and
fetch a greater market share and thus a much higher market position
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Table of Contents
Introduction......................................................................................................................................5
Future of the Industry in 2020 and beyond......................................................................................6
The organization’s innovation requirements 2020 and beyond.......................................................8
Building the future innovation capabilities of the organization....................................................10
Conclusion:....................................................................................................................................14
Reference Lists:.............................................................................................................................15
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Introduction
Innovation is the process of introducing new ideas, process and systems in order to create value
for an organization. It can be a way to overcome with old ideas and techniques. Innovation is the
practical outcomes of an invention. Incorporating innovation in business will help to save
precious time and will give opportunity for competitive advantages. Organizations use creativity
to stay innovative. It encourages an organization to think in a different manner. In other word,
innovation consists of complex activities, which gives ideal solutions tricky problems. The three
components of innovation are management, strategy and competency. This needs to understand
appropriately for a successful innovation. Innovations help to boosting up business. Apart from
this, it provides a competitive edge that each business can make an effort to achieve. There is a
huge chance of increase in productivity through innovation. Organizations get innovative ideas
for their partners, employees, marketing experts and customers. This report will cover future of
industry, organization’s innovation requirements and bases for building future innovation
capabilities of the organization. The chosen organization for this study is Coca-Cola, which is an
American retailer, marketer and manufacturer of non-alcoholic beverages and syrups around the
world.
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Future of the Industry in 2020 and beyond
Future of Coca-Cola depends upon following eight trends, which will the company to become
dominant in food and beverages industries in 2020 and beyond.
Company size matters: In upcoming future, market size of Coca- Cola will matter a lot.
Retailers and manufacturers of same industry will try to enter in a new market segment with
facilities like increased production volume and negotiation power and wider portfolios.
However, this organization will limit market competition ensuring a stable market share through
consolidation and acquisition (Nordic.businessinsider.com., 2018)
Value chain gets a makeover: Coca- Cola will look for new paths to increase profit margins
through restructuring value chain. It will establish partnership with local producers for smooth
promotion of products. Now it is trying to acquire bottling and distribution companies, which
will help the company to control supply chain and reducing additional costs.
Market share of retail brands: Coca- Cola is choosing to invest more in order to strengthen its
brand. It has to introduce more promotional activities and conduct awareness programs in order
to let every customer to understand its identity in the market place. This will help to stand out
against traditional in house retail brands in future. All these efforts will enable the company to
achieve number one position in the retail and manufacturing industry by 2020.
Sustainability: It has become the core business practice for Coca- Cola. It is launching new
products and seasonal offerings, which will enable the company to gain a healthy market share in
upcoming future. It must focus on providing quality products with an affordable cost. This will
allow each customer to buy company’s product irrespective of their economic class, so that it can
get a customer base of around 90% as compare to current market scenario.
Developing markets hold the key to success: Markets of developing countries can be identified
as potential markets for Coca- Cola. The household income of developing countries will increase
to 53.2% in 2020 from now. Therefore, their purchasing power will be increased. It will enhance
the annual sale up to 15% (Statista, 2018).
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Food safety takes centre position: Food safety is an essential factor for Coca- Cola. Customers
demand a transparency when it comes to the point of food safety. People are becoming health
conscious and their demand for food standards will be increased by 2020. The organization must
respond to such issues through ensuring raw material quality and enhancing internal quality
control. It is trying to achieve 98% compliance with supplier ensuring overall food safety
Statista, 2018). Zero calorie colas by Coca- Cola will become the reason of growth of total
portfolios by 2020.
Consumers demand products that are more diverse: With an increased population growth,
demand for diverse products has increased. Companies will see a demand for wide range of
products depending upon different age category. In order to match with needs of consumers,
Coca- Cola will start offering healthy oriented beverages.
Long-term survival: In upcoming year, companies will face a challenge in terms of high
production cost and high need of products. Coca- Cola will focus on improving efficiencies of
manufacturing plants by reducing number of SKUs. Labor and plant efficiency can be optimized
through usage of new technologies in production point. It aims at increasing overall efficiency
by 25% as compare to 2015 (Statista, 2018).
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The organization’s innovation requirements 2020 and beyond
The vision and mission of the Coca-Cola Company has always been to refresh the world, to
inspire moments of optimism and to create value and make a difference. The world and all the
markets worldwide are changing at a rapid pace. The company needs to maintain a consistent
pattern of growth in the coming years to achieve the target in 2020. The innovation targets of the
company can be based on both research and development as well as marketing of the brand.
The company must create competitive advantage by innovative new product launches and
promoting the existing product in a new way to boost sales. To achieve sustainable growth in the
coming years the company needs to make the necessary changes in their approach towards new
product launches. The company came out with a new product that is the glucose drink which has
the important vitamins and the nutrients in the powder form. The name of the product is
Aquarius glucocharge and Minute Maid Vitingo. The products are aimed at making a mark in the
market has provide momentum for the growth of the brand.
The company can venture into more such marketing strategies and new precuts such that they
lead to making the brand more recognized in the new generation. The management team of
Coca-Cola has also aimed at making the new generation fall in love with Coca Cola in their new
mission strategy (coca-cola.com, 2018). One such product the company can launch is the
powdered Cola which can be mixed with water to get a drink very much similar to the fizzy
Coca-Cola which is the flagship product of the company. The new product can be marketed in
the markets where there is scope of promoting a drink which is easy to make and portable. This
can also sell well in the countries where there is popularity among kids for drink powders.
Moreover, the innovation till 2020 is also an important stepping-stone for the company to enter
the new decade in the 21st century. The brand value of Coca-Cola has always been very high
because of the strong market penetration in the world-wide market (coca-cola.com, 2018). The
company is almost a century old hence it is a known name in the household. Coca-Cola has a
global leadership in the sustainable use of water in the processes employed in the factory.
The company believes that it needs to come up with new ideas whenever there is competition in
the market. In order to achieve this target, the company needs to change the customer strategy
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and creating the value for the customer. The Coca-Cola company needs to align itself along the
taste and choice of the consumer instead of telling them what they should prefer drinking. Thus,
the company is taking a path quite opposite to what the natural approach is in the market. This
can eventually lead to making the company taking the lead in the coming decade that starts with
the beginning of 2020.
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Building the future innovation capabilities of the organization
The innovation capabilities of any organization can be built on the basis of certain key
foundations. These foundations include the application of management strategy and focusing
more on the research and development and business generation activities.
The key steps that need to be taken for achieving this target include some of the following
mentioned-
Building the corporate leadership principles for the organization
In order to make an innovation roadmap, the company needs to make the necessary planning
with the top level management. Moreover, innovation is the key that can transform any company
from a beginner to a goliath. In the case of Coca-Cola, the market is already penetrated by the
company, but to remain relevant in the ever changing scenario, the company must take
innovation very seriously.
Identifying the key areas related to the objectives of the company
The whole task of identification of all the key areas dives into three major categories that are-
 The organization
 The products and services
 The infrastructure and support
The key responsibilities of the managers and the executives
The leadership in the company is very important to keep the organization on the track of
innovation. The key people responsible for the development of the innovation are the ones
making the policies for all the goals. A system needs to be developed such that it works and
implements a modern HR function and research into the heart of the company.
Developing the capabilities through actions
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The processes where there is a necessity of innovation are the important actions that determine
how quickly the target can be achieved. Experimentation is also considered as an important
activity that can lead to new ideas and eventually innovation in its raw form. The core team and
the leadership can push the whole organization for making things work towards achieving the
target. The organization can autonomously also push the teams towards striving for achieving
required innovation with proper research and coordination (Camisón and Villar-López, 2014).
Generating a strong spirit in the organization
There is an important need to make the organization realize that it is capable for making the
required changes in the structure. The key here is to build a proof based on the notion of evident
outreach and increase in the capabilities. There is a need to make the organization feel more
hungry, skilled and capable when it comes to innovation and the efforts regarding the same. The
process of innovation is not easy and it is actually a journey of change from the set patterns to
transforming into a new organization in terms of the visions and goals (Büschgens et al., 2013).
The same can also be achieved if the organization focuses on developing the discipline in the
workforce and making innovation non-negotiable. The moment the need for innovation becomes
non-negotiable is the moment that the company can actually move towards innovating new ways
and products.
Rethinking of the high level business strategy
The conventional approaches are not always the best to implement in the new age technological
scenario. This calls for long term business strategies as well as diversifying the approaches into
potential areas of growing into the business. The important skill is to be able to review and
rethink on the lines of innovation. The crucial point is that this process needs to be spontaneous
and retaining the overall integrity of the idea (Camisón and Villar-López, 2014).
Recognizing and protecting the Ideas generated within the organization
The employees are many times instrumental in making the new ideas work in the monotonous
environment of the work. Many entrepreneurs within an organization itself are capable of
making the changes necessary for innovation in the organization. The hierarchical structure does
not allow such freedom for the employee to make the changes in the status quo and go all out to
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innovate new things for the company. The important thing to understand is that the average
workforce in any organization is the best resource for making the innovation work for the
company. The companies like Coca-Cola have been pivotal in retaining the top talent in the
industry and it is through this culture that the organization has flourished in the past decades. It is
not always the profit that determines the sustainability and the future of the company. Most of
the times, it is the ability of the company to come with new idea and dominate the market that
lead to historical success stories.
Creating the jobs focused organization
Many companies that start with the focus entirely on the customer lose out on the vision as they
grow bigger and more successful. This can lead to the company losing sight of what the
customer really wants and values. The benefits of making the organization job-oriented can help
in articulating the company’s purpose in such a way that it will unify the culture around a
customer-centric mission. The wide range of key areas where the organization
Building an innovation culture: incubate, do not mandate
A systematic top to bottom initiatives results in creating a innovation capability with sustainable
approach. In case of Coca-Cola, the management has to focus on insights that subordinates are
giving values and addressed properly during innovation process. This will lead to generating
innovative ideas and concepts (Jaruzelski and Katzenbach, 2012). Involvement of staffs from
each level will make the innovation more creative. Senior executives should understand the
origin of such ideas coming from low-level employees, this will improve their confidence. They
will give more efforts to bring such ideas in front of top management. This significantly
influences decision of executive level. Critical success factor of any innovation process relies
upon following culture.
 Implementing a holistic approach of innovation will encourage the organization and its
staff to stay confident by responding to changes.
 Organization must develop a transparent and secure innovation process. Individual
innovative process may not require any healthy rules to operate, but collective innovation
approach requires a systematic process.
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